Terrorist Asset-Freezing etc. Bill [HL]

My Lords, before moving the government amendment, I will make some brief introductory remarks to the Committee. At Second Reading, I explained to the House that the Government took seriously the civil liberties concerns that had been raised about the terrorist asset-freezing regime, and that they were committed to striking the appropriate balance between protecting national security and civil liberties. I explained that the Treasury would do further work over the summer, informed by the wider Home Office-led review of counterterrorism and security powers in considering civil liberties safeguards on asset freezing, and that if any government amendments were tabled to strengthen civil liberties safeguards, this would be done in Committee. I am pleased to say that the Treasury has concluded its consideration of civil liberties safeguards on asset freezing, and has now brought forward amendments to strengthen safeguards in two key areas. First, we have tabled an amendment to raise the legal threshold for freezing assets from ““reasonable suspicion”” to ““reasonable belief””, with ““reasonable suspicion”” only able to be used for interim designations of 30 days. Secondly, we have tabled an amendment stating that challenges to Treasury decisions to impose, vary or renew asset freezes should be heard by the courts under an appeal rather than a judicial review procedure. This ensures that there will be a robust, in-depth review by the courts of the Treasury decisions. I hope that noble Lords will agree that these amendments address the concerns raised at Second Reading, and that they significantly improve the Bill. I know that noble Lords also are keenly awaiting the outcome of the Home Office-led wider review of counterterrorism and security powers, but I cannot provide the Committee today with a date for publication of that review. However, the Treasury's conclusions on asset freezing and safeguards are not intended to pre-empt the Home Office review, which has a separate piece of work. I assure noble Lords that the Treasury's work on civil liberties safeguards has not been carried out in a vacuum. The Home Office and other Government departments have been consulted on, and have agreed to, the conclusions reached by the Treasury. While the Government have an overall coherent approach to counterterrorism powers, this does not mean that each power should be subject to the same civil liberties safeguards, as the appropriate level of safeguards will vary depending on the nature of the power and how it is used. In particular, the Treasury and the Home Office agree that there are significant differences between asset-freezing and control orders, and that in consequence the approach that we take on asset freezing reflects the circumstances of this tool and does not need to be aligned with the Government’s approach to control orders, which is still under consideration. I turn in more detail to the government amendments to Clause 2. The clause specifies the circumstances in which the Treasury has the power to designate persons. The Bill contains a provision for the Treasury to make an asset freeze on the basis of reasonable suspicion that that person is or has been involved in terrorism. The Government have tabled amendments to Clause 2, with a series of consequential amendments. These allow the Treasury to make an interim designation using the reasonable suspicion threshold for a period of 30 days. The Treasury can only make a final designation—that is, beyond 30 days—if it has reasonable belief that a person is or has been involved in terrorism. For ease of reference, Amendment 2 is the substantive amendment that raises the legal threshold from reasonable suspicion to reasonable belief. Amendments 29, 30, 31 and 32 permit the Treasury to make an interim designation. The other government amendments in the group are consequential and ensure that other parts of the Bill that referred to designations now refer to initial and final designations. I will explain why we have tabled these amendments. I note that the noble Lord, Lord Pannick, has tabled an amendment on a similar theme, and I look forward to his remarks as the debate continues. We have retained reasonable suspicion for a 30-day interim period because we recognise that there may be occasions when asset freezes need to be imposed where there is a terrorist threat, but when, for example, investigations are continuing and it may not be possible to meet a higher threshold at the time. This was the case, for example, with the asset freezes against the attempted transatlantic airline bombers in August 2006. In these cases, asset freezes were made soon after arrests, to prevent assets being dispersed to associates of the plotters. The police assessed the freezes to be of significant operational impact. However, the Government are committed to ensuring that, in protecting the public from terrorism-related threats, civil liberties safeguards are not undermined. For this reason, we intend to raise, after 30 days, the threshold for asset freezes to reasonable belief that someone is or has been involved in terrorism. We believe that maintaining the freeze for only 30 days on the basis of reasonable suspicion provides a reasonable period in which operational partners can gather further information and present a case to the Treasury to maintain an asset freeze against the higher legal threshold. Alternatively, if a case cannot be made against the higher legal test, the asset freeze will be dropped. The test of reasonable belief brings terrorist asset freezing in line with the test used for Treasury powers to freeze assets under the Anti-terrorism, Crime and Security Act 2001, for imposing financial restrictions under the Counter-Terrorism Act 2008 as well as for the test for Home Office powers to proscribe terrorist groups. The proposals are also in line with a number of other countries’ asset-freezing powers. The test of reasonable belief is also consistent with the preventive rationale of the United Nations Security Council resolution to help to prevent terrorist acts by stopping funds or economic resources being used or diverted for terrorist purposes and the international standards that were set by the Financial Action Task Force, which require asset freezes to be imposed, "““upon having reasonable grounds, or a reasonable basis, to suspect or believe that a person or entity is a terrorist, one who finances terrorism or a terrorist organisation””." Amending the Bill in this way will allow the UK to maintain an effective asset-freezing regime that meets national security requirements, is consistent with international obligations and standards and meets legitimate civil liberties concerns that reasonable suspicion is too low a threshold for freezing for anything other than a very short period. The Government do not support moving to a higher legal threshold than reasonable belief, for example by imposing asset freezing only on those who have been convicted of a terrorist offence. Such a move would undermine the preventive nature of the regime and therefore limit the use of asset freezing to protect against national security risks. It would also be incompatible with international best practice and the aims of the United Nations Security Council resolution. Finally, I should note that we will continue to require the Treasury to consider an asset freeze—be it an interim designation on suspicion or a designation requiring reasonable belief—to be necessary to protect members of the public from the risk of terrorist acts before they can be implemented. The amendments will ensure that an asset freeze will be made only where it is necessary and proportionate to do so and they balance the effect on the individual and the need for public safety. I beg to move.